Direct Selling in Asia Pacific

July 2019

The internet has transformed the way consumers shop and has thus posed a threat to the direct selling industry. Asia Pacific’s rising affluence and huge millennial population presents companies with opportunities for growth, especially in emerging Asia. Direct selling players that are quick to adapt in terms of product innovation and embracing omnichannel strategies will continue to stay relevant.

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Key findings

Direct selling businesses face rising competition from e-commerce players and increased scrutiny from regulators

Direct selling has been hit by slow growth in recent years due to growing competition from e-commerce players. The convenience and anonymity of making online purchases has weighed down on direct selling growth. Plagued with several financing frauds and pyramid selling scams, the industry has faced increased scrutiny from regulators and growing distrust among consumers.

Consumer health and beauty and personal care products enjoy strongest growth

Out of all product categories, consumer health and beauty and personal care are the top products that are driving growth in the region. Besides the greater propensity to spend by Asia Pacific’s burgeoning middle-class, consumers are also paying greater attention to their health and beauty. Weight management, vitamins and natural ingredient-infused skin care products are some of the products that are gaining traction among consumers.

Players focused on expanding their footprint in emerging markets

Direct sellers are making inroads into emerging markets, especially the lower-tier cities of China, India and Indonesia. Given the low presence of physical shops and a less educated population, the nature of the direct selling business resonates well with this consumer segment. Consumers appreciate the ability to receive personalised advice for health and beauty products directly from sales personnel.

Embrace omnichannel strategies to stay competitive

Given the threat of e-commerce, direct sellers will need to reinvent the shopping experience by embracing multichannel. Several players in China have recently established a physical presence and are committed to providing customers with a unique and immersive retail experience.

Introduction

Scope
Key findings

Regional Overview

Asia Pacific accounts for the largest share of value sales globally
Consumer distrust and rise of e-commerce weigh on direct selling growth
Consumer health products account for a significant share of value sales
Consumer health and beauty and personal care continue to lead
Consumer health products experience strong growth in China
Emerging markets observe strongest growth in direct selling (1)
Emerging markets observe strongest growth in direct selling (2)

Leading Companies and Brands

Market undergoes further fragmentation with small players emerging
Amway leads the pack in Asia Pacific but faces strong competition in China
Amway and Herbalife focus on expanding in emerging markets
Crackdown on pyramid schemes sends Nu Skin down the ranks

Forecast Projections

Direct selling forecasted to observe slow, positive growth (1)
Direct selling forecasted to observe slow, positive growth (2)

Country Snapshots

China: market context
China: competitive and retail landscape
Japan: market context
Japan: competitive and retail landscape
South Korea: market context
South Korea: competitive and retail landscape
Thailand: market context
Thailand: competitive and retail landscape
Taiwan: market context
Taiwan: competitive and retail landscape
Malaysia: market context
Malaysia: competitive and retail landscape
India: market context
India: competitive and retail landscape
Philippines: market context
Philippines: competitive and retail landscape
Indonesia: market context
Indonesia: competitive and retail landscape
Hong Kong: market context
Hong Kong: competitive and retail landscape
Vietnam: market context
Vietnam: competitive and retail landscape
Singapore: market context
Singapore: competitive and retail landscape

Appendix: Competitor Analytics

Competitor Analytics tool
Overview
Competitors
Market Overlap
Treemap
Overlap Matrices

Appendix: Industry Forecast Model

About Euromonitor International’s Industry Forecast Model
Soft drivers and the Industry Forecast Model
Growth decomposition explained
Significance and applications for growth decomposition
Key applications for Industry Forecast Models
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